Feb. 4, 2009 -- President Barack Obama has signed a bill that adds an estimated 4 million children to government-sponsored health insurance coverage.

The bill adds nearly $33 billion to the State Children's Health Insurance Program (SCHIP). In all it would insure 11 million children in lower-income families.

The bill gained final passage in the House Wednesday by a vote of 290-135. Democrats praised the move as a first step toward a broad overhaul of the U.S. health care system.

"It's about time that the most civilized country in the world gave health care coverage to all of its children," said Rep. Diana DeGette, D-Colo., one of the chief sponsors of the bill.

Forty Republicans voted to back the measure, which includes expanded dental coverage for children. But many others complained that the bill needlessly pays for coverage for children from families that can afford private policies.

"Do we want to freeze out the private sector for health insurance?" says Rep. Joe Barton, R-Texas, the senior Republican on the committee with jurisdiction over the SCHIP program.

The new law pays for the expanded coverage by raising federal tobacco taxes 61 cents per pack. That brings the total federal tax to $1.01 per pack. All 50 states have their own tobacco taxes, averaging $1.19 per pack, but ranging from $0.07 in South Carolina to $2.75 per pack in New York, according to the Campaign for Tobacco-Free Kids.

"This is a tax increase," said Rep. Marsha Blackburn, R-Tenn., before voting against the bill.

"Increasing the federal tobacco tax to fund SCHIP is a win-win proposal that will help children get the health care they need, while also acting as a deterrent to young smokers and potential smokers. Studies show that for every 10 percent increase in the price of cigarettes youth smoking is reduced by seven percent, and overall tobacco consumption is reduced by four percent," Nancy Nielsen, MD, president of the American Medical Association, said in a statement.

Congress first passed a similar SCHIP expansion in 2007. The bill was vetoed twice by President George W. Bush, and supporters fell a dozen votes short of an override in the House.